Instacart (CART) shares are falling following a report from The Information indicating that the company experienced slowing revenue growth and lower profits. The grocery delivery company, which recently became public, is now operating with a "Hold" rating.
Nvidia (NVDA) stock rises ahead of Monday's closing bell after being added to Goldman Sachs' "Conviction Buy List." Goldman analysts cite Nvidia's leadership position in artificial intelligence as the motivating factor for the call.
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- And shares of Instacart falling today, down in the red on a report from the information, saying the banks that underwrote the company's IPO see slower revenue growth and lower profits than it reported in the first half of the year. Stock also moving on a hold rating from Gordon Haskett, the analyst citing a number of headwinds for the grocery delivery company.
So this one is another interesting story, Julie, because when they made their debut, there were some positives. It was a decent bottom line, right? A lot of tech companies as we know, when they make their debut, they don't necessarily show that. But on the other hand, growth had slowed, and Instacart would say, well, listen, that's tough comps. That's macro headwinds like inflation. Analysts are saying, that probably also is competition sneaking up on you, and Instacart has a lot of it.
JULIE HYMAN: It does have a lot of it. I mean, you have to wonder at what point are some of these companies that did come public wishing they hadn't. I mean, at the same time, by the same token, Instacart presumably needed to tap the public markets to get access to capital here, so I don't know. I mean, if you look at how it's performed, it's got four holds on it so far.
- Not a lot of enthusiasm.
JULIE HYMAN: No buys, no sells.
- You also kind of wonder to the extent that, you know, we talked to-- listen, we were just talking to economists. The extent that you start getting nervous about what the consumer might be feeling, the jitters they start feeling. You would think it's possible, of course, if they start getting nervous, a grocery delivery app could be one of the first things to go.
JULIE HYMAN: It's expensive.
JULIE HYMAN: To get your--
- We both tried it, yeah.
JULIE HYMAN: --groceries delivered. I mean, I like grocery shopping myself. I'm one of those weird people who likes to go to the store.
- Nothing weird about that.
JULIE HYMAN: And pick out stuff for myself.
- And you actually--
JULIE HYMAN: You know, I like to go to the farmers market. I went this weekend. It makes me very happy. So, yeah. I'm-- yeah, I'm one of those. But, yeah, but to your point, if people are cutting back-- I think the question is when and whether we will see higher income consumers cut back and decide where to-- where to redeploy their money. So that's-- that's really the big question here. We've seen it on the lower end.
- Good point. Yeah.
JULIE HYMAN: The higher end is what would affect the likes of Instacart. All right, let's take a look at some other movers here. We've got shares of Kellogg trading lower on the day. That's after the 117-year-old maker of Pringles and Frosted Flakes split into two companies. Things like Pringles Pop Tarts, Cheez-Its are going to operate under the Kellanovella brand, which is going to retain the K ticker that has been Kellogg's. Cereals like Froot Loops and Special K will operate under the name WK Kellogg. KLG is the ticker there on the New York stock exchange, which is for the founder of the company. I like Kellanovella because it rhymes with telenovela. I don't know. I think it's--
- That's a good reason to buy.
JULIE HYMAN: I think it's kind of-- I think it's kind of fun here.
- It rhymes. It must be true.
JULIE HYMAN: But it is interesting that you were seeing this spinoff here. And our Brian Sozzi, who talked to the CEO of I think now Kellanovella today, also cited some analyst commentary from Jefferies. Wait, what am I saying? Kellanova. I'm saying it wrong.
- Sounded right to me.
JULIE HYMAN: Because I'm saying telenovela.
- It sounded fine to me.
JULIE HYMAN: It's Kellanova, not Kellanovella. Whoops. All right, anyway, so the analysts over at Jefferies is saying that they're not necessarily that excited, I think, about the--
- Well, you know, the strategy, I guess, is let's-- we're going to spin off the cereals. We're going to spin off the Frosted Flakes and the Froot Loops, which I love both. No foul there. But why-- and I guess the idea is once we do that, that performance, the business, that division will just perform better, and I guess I get it, because in theory, so you're more focused, you're narrow, you're not going to be distracted by the Pringles anymore, the snacks. But it looks like at least investors initially here a little skeptical.
JULIE HYMAN: It seems that way, and then there's another spinoff I just wanted to quickly mention today. Danaher, the big tool and testing systems maker, is also doing a spinoff on a related note here. So Danaher is spinning off Veralto, which is its environmental and applied solutions segment. Hopefully I've said that one right. VLTO. It's faring a little bit better. That is the spunoff-- the spinoff is. It's up about a half a percent. Danaher still down about 3.25% today. So a lot of attempts to unlock value here.
- A lot of moves. And lastly, let's look at shares of NVIDIA, trading higher today. That's after Goldman Sachs added the stock to its conviction buy list. Goldman attributing the move to NVIDIA's position within the AI race. Nice tack on there, 2%. NVIDIA actually had a tougher September, but, of course, this one has been a rocket ship. It's still up more than 100% this year, and what analysts seem to like here, they point out the competitive moat, the broadening demand in the data center, and they think perhaps further buybacks.
Of course, when talking to NVIDIA too is when you look at that chart, no surprise. When you see that kind of chart it has attracted a lot of competition too. That'll be fun to watch. AMD, Intel, the big cloud computing giants, the Amazons and Googles all also developing their own chips, so--
JULIE HYMAN: They are developing their own chips.
- --a fight to watch.
JULIE HYMAN: I mean, the price target on this at $605, because obviously we know that NVIDIA has already had a lot of upside. It's already on a lot of, you know, buy lists across the Street. Goldman putting it on its conviction buy list as just like a little cherry on top or a little further push here.
- We love it even more.
JULIE HYMAN: Yeah, I guess so. I mean, but when you've seen the stock go up 265% over the past year, and then seeing that upside to $605, it again just emphasizes the view on the Street that there's NVIDIA and there's everyone else when it comes to AI.
- To your point, very good one, 95% of analysts covering this name still rated to buy here.